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The pressures faced by NATO and EU members in meeting austerity measures while maintaining military readiness are unprecedented not by their scale and intensity, but by the conjunction of several political and social features.

First, the economic crisis stimulates political isolationism and economic nationalism, which tends to be detrimental to the multilateral edifice that has emerged since the end of the Cold War. Second, the leading actors of this architecture, the US, France, Germany and the UK are contending with the need for fiscal restraint and responsibility, making the most progressive government think twice about increased public spending. Among the countries listed above, a healthy defence sector compounds the dilemma; at a moment when multilateralism is fragmenting, the necessity to maintain ever more costly defence postures impacts one of their most lucrative economic sectors.

Recently, outgoing US Defence Secretary Robert Gates has chastised (again) NATO European governments for their unwillingness to share the burden of the Alliance. What Mr. Gates actually meant was that European governments should think about purchasing their military capability in the United States. Yet Mr. Gates' unilateral defence spending cuts, and his public questioning about the rectitude of the F-35 Joint Strike Fighter's development management, contradict his pleas for greater defence spending by European members of NATO. And, as the United States has withdrawn from yet another foray in Middle Eastern lands, it has left the United Kingdom and France, as principal actors in the Libyan mission, to call for more equal burden-sharing, something the United States was always the first to do in the past.

Current debt talks cleverly avoid the painful (for both the Left and the Right) debate of cutting a 500 billion USD defence budget further. This seems irrational to European analysts, especially as Europe struggles with its own debt crisis. But in fact, this is a logical step. In the US, defence spending acts in lieu of welfare spending. Recently, Canada has partially adopted this concept. The Harper Government's Economic Action Plan, designed to maintain the deficit at appropriate levels, has been significantly devoted to defence-related spending. Rather than distributing welfare checks to stimulate the retail sector of the economy, this creates (temporary) jobs in a given sector, enabling consumers to spend their salaries on larger items, thus giving them confidence. Note, however, that Canada's economic stimulus is being spent partly on the building of new Coast Guard vessels (fifteen new keels), not on expeditionary capabilities. This is a symptom of the rush to resources in the Arctic, yes, but also of a general fatigue with out-of-area forays. For the foreseeable future, the United States itself, as was demonstrated by its hands-off approach with Libya, will tend to focus on its domestic economic problems, and will likely shy away from further adventures. This posture may be permanent, although one should not discount the US' awesome power to regenerate.

Austerity forces countries to "return home", further aggravating the fragmentation of international regimes and alliances. The fragmentation of international political power means a shift away from multilateralism, which may affect the power of alliances. In the interim, however, this means that European partners will be forced to shoulder a greater share of the burdens especially as more crises of the day are emerging on their shores and borders. If Libya and Syria are the shape of things to come, then we will be witnessing a major shift in political power associated with the burden of responsibility. Medium European powers, namely Greece, Italy, Spain and Portugal, are also "old" NATO members, but their weight is shrinking with NATO and the EU because of their inability to face the exigencies of membership in monetary and capability terms.

In their case, the economic crisis translates more readily into difficulties of maintaining an adequate defence posture. Whereas a country like Turkey could always leverage its strategic position for political advantage, southern European powers are unable to do the same because of the requirement to cut spending. This means also cuts in defence and logically, and consequently the forfeiting of any active role in the Libyan adventure, where their interests lie. Smaller powers, like the new NATO members, continue to perceive a threat coming from Russia but despite their sacrifices in Afghanistan and in Iraq, have been unable to leverage this advantage to steer NATO back into Europe.

Take the example of the Baltic NATO member-states: there too, defence postures focus more on national than on Alliance interest. For example, Latvia has also begun investing in a significant coastal patrol boat programme, while Estonia has attracted topical attention by establishing a cyber-defence centre of excellence, a platform which allows it to force the Alliance in reckoning with this new threat. Lithuania has flexed its diplomatic and public affairs muscle in attempts to secure a continuation of the Baltic air policing mission provided by NATO. Evidently, Russia looms large in these decisions.

Definitely, the Baltic states' governments exhibit disquiet with out-of-area operations. The Baltic states in particular understand, as it was noted in a STRATFOR article[1], that the Libyan adventure helps discord within NATO, and that Russia might be keen on exploiting any rift. Those small states whose security depends on US involvement and leadership in Alliance affairs are now sitting between two stools, and this has led them to consider more autonomous defence postures (which remain admittedly limited). Seeking another large power as protector is not a realistic position; the historical fickleness (and notorious self-interest) of large European powers makes them unreliable. The more natural large European power with whom to carry favour would seem to be Poland, which until recently had been promised an anti-ballistic missile system deployment on its soil by the US. The fact that this system will not be deployed has forced Warsaw to effect a reconciliation of sorts with Moscow. Since the political agendas of the Baltic States and Poland do not concord on this point, a closer association within the Alliance of these countries is not on the cards. Meanwhile, the more vocal critics of NATO's inability to formulate a clear and unambiguous position relative to the Libyan adventure has not been the United States, but rather France and the UK. These classical European powers are coming back to the fore, with Germany a close second.

France, Germany and the UK are wrestling with two parallel problems; a roguish neighbourhood, and a troubled EU economy. While France and Germany lead the way in attempting to solve the EU's and the Eurozone's crisis generated by medium European powers, France and the UK are leading the charge against Muammar Qaddafi. It is symptomatic of the redistribution of power within the Alliance, the forced spending cuts, the inability to gain consensus on what NATO is for (or against), and also to agree on burden-sharing. Multilateralism may soon give way to real multipolarity. As US, Greek, Spanish, Italian and Portuguese influence is downgraded, French, German, British, Eastern European and Turkish influence finds itself relatively upgraded. This shift cannot be counter-acted by defence spending (save in Germany, perhaps), as it will compound the public deficit, such spending being thought "useless" by the constituency. Shouldering this responsibility amounts to political power, because the expense in treasure becomes a lever that the United States has (temporarily) handed over. Spain, Italy and Greece, all of which are more proximate to Libya, cannot leverage their strategic position because their economic predicament forbids their involvement. This compounds the disunity within the Alliance, and disunity is now the chief threat, but so is reckless spending. So it is not surprising to see a tepid commitment to the NATO mission in Libya.[2]

It is symptomatic of the redistribution of power within the Alliance, the forced spending cuts, the inability to gain consensus on what NATO is for (or against), and also to agree on burden-sharing. Multilateralism may soon give way to real multipolarity. As US, Greek, Spanish, Italian and Portuguese influence is downgraded, French, German, British, Eastern European and Turkish influence finds itself relatively upgraded. This shift cannot be counter-acted by defence spending (save in Germany, perhaps), as it will compound the public deficit, such spending being thought "useless" by the constituency.

At its April ministerial meeting in Berlin, on 14 April 2011, NATO ministers realised that disunity threatened NATO. This didn't prevent them from issuing a vague position on Libya, but it has forced NATO to issue a clarification on its crisis management and response procedure less than a month later.[3] The process is straightforward: six phases characterise NATO response; i) early warning ii) assessment iii) options development iv) planning v) execution and vi) transition. More to the point, is the sentiment that, as regards non-Article 5 operations, this process proposes areas where member-states can provide their input without necessarily opting for full-fledged military response. This affords members the opportunity to play a role commensurate to their physical and financial capabilities, and therefore preserves NATO unity (and unity of effort) by proposing participation avenues all along the crisis response process, not only or mainly in the execution phase. This could have repercussions for the soundness of Article 5. Here, the Baltic States should be especially worried.

The Nuclear Deterrence Dilemma

The skeptics may say that US political power remains intact because of its large nuclear arsenal. Even with the cuts in nuclear armaments agreed to with Russia under the New START agreements in 2010, the US conventional and nuclear arsenal still dwarfs that of all of its adversaries combined. Furthermore, the nuclear argument discounts the rapidly changing strategic context, which makes such weaponry less relevant than ever.

First, there is the Fukushima disaster, which conspires to make all things nuclear a taboo. Recently, Germany has demonstrated leadership in committing to doing away with this form of energy within the next decade. Second, developments in the Middle East have brought two effects. The first has been to marginalize Iran, which seems unable to effect change in its vicinity, and which has dropped in media coverage. Also, it is now evident for even the most far-right politician that Middle-Eastern constituencies are not the slavish victims of their regimes, that they too aspire to Western-style democratic freedoms. Making these constituencies like-minded and oppositional to regimes that the West has long sought to deter through nuclear arms, also renders nuclear deterrence impossible against rogue regimes, because they actually do not have constituent followers in fact.

Nuclear power is not the trump card it once was, especially as Russia continues to normalize its relations with Europe, and NATO. This could in fact be the sort of development that makes greater cuts in nuclear (tactical and strategic) arsenals possible, because deterrence, in addition to being "invisible" is now "unusable."[4] The commitment towards an all-inclusive ballistic missile defence system, that is, inclusive of Moscow's requirements (and perhaps of its participation) could find echo in Washington, despite the reservations of junior NATO members. As the New START is implemented, BMD will gain ascendancy as a strategic concept, and will permit further reductions in nuclear armaments. This disuse compounds the power shift within NATO and the EU at a moment when defence spending will remain at an all-time low for the foreseeable future.

The countries that will benefit from this shift will do well to economize their political power as their citizenry will be unlikely to tolerate "useless" defence spending for a long time to come. Overall this may threaten the existence of NATO more than its perceived irrelevance or ineffectiveness, both of which remain debatable.

There is every evidence that the real determinant factor will be the ability of NATO members to demonstrate resilience under austerity. So far, certain countries seem to have fared better, including those who were considered less politically significant. But Russia is also coping quite well, thanks to its vast natural resources. Fortunately, economic interdependence will tend to calm strategic appetites and tendencies to effect radical change, as the power shift we are witnessing is already too much to stomach.